Investing in Apple in 2012
I’m an Apple shareholder and a big fan of the late Steve Jobs. As an Apple investor, I’m in a tricky spot.
After thinking long and hard about this decision, I’ve decided to stay with Apple, although I do realize that there is a downside risk. Unless things change, however, I do believe that Apple shareholders will be happy they either bought or held onto their Apple shares come 2013.
I’ll list my reasoning in bullet points for why I think it’s still a good stock to own:
- Cash rich and can weather any storm, might offer a dividend at some point. They certainly could.
- Low P/E ratio considering how solid this company is
- People underestimate the Iphone 4S. I think it’s a smart move. It will sell very well in Asia because of prestige alone, and I think Apple will role out a new Iphone 5 that will shock the world come the summer of 2012. That’s just when the 2 year contracts of the Iphone 4 users of the US run out. Perfect timing…..
- Apple’s international prestige as a cool brand is totally underestimated and misunderstood by analysts. I know many people in Shanghai for example who have the Iphone 4 and now the Iphone 4S. It’s a status symbol and there is a kind of “anti price sensitivity” associated with it. China is not alone either. Large and rich Asian city centers think the same way. Millions of men will try to woo their beautiful girlfriends with the Iphone 4 as a gift. Many people just don’t understand how true that is. Once the Iphone 5 comes out, they will do it again. It’s crazy but true.
- The continuous adoption of Apple hand held gadgets will push people to buy the laptops and desktops. There are many Apple converts yet to be discovered.
- People overplay the importance of Jobs. He was truly one of the best CEO’s to ever walk the planet, but he left a legacy that his very smart team will be able to follow for at least another year or 2.
- Apple is a kind of luxury product and when people see large jobless claims then they see the stock tank. It makes no sense because it’s the upper middle to upper class who is buying the Iphones anyway. In China, people will spend a whole month’s salary on an Iphone 4S or Ipad 2 even if it makes little logical sense. A slowdown in jobs won’t slow Apple’s sales too much to the people who already have money.
- Many people don’t feel this way, but a surprisingly large number of people will buy Apple stuff almost out of respect to the legacy and genius of Steve Jobs. He is so big in the media now that it makes his products almost like paintings of the famous painters who passed away. That is a bit of a stretch but it’s a phenomenon none the less.
- His best selling book and media coverage is free advertising for Apple and they will profit a lot from it.
All in all, 2012 should be a strong year for Apple shareholders and I certainly won’t be selling my stocks until they are trading in the $550 range at least. I don’t know if that will happen but I’ve got my money riding on the fact that it will. I recommend you do the same.